With the increasing demand for shorter delivery times and reduced inventory costs, perhaps you are considering cross-docking as a viable option to improve your supply chain and warehouse operations. SAP Extended Warehouse Management (EWM) in SAP ERP Central Component (ECC) 6.0 offers a comprehensive cross-docking functionality that is integrated with your warehouse module. Cross-docking is a process in which goods are shipped to the customer or destination directly at the time of receipt based on appropriate linkages such as inbound receipts that can fulfill outbound order requirements. Without cross-docking, goods are stored in the warehouse instead of being shipped immediately upon arrival. Cross-docking could benefit your supply chain in several ways. Here are a few key advantages of cross-docking: Inventory cost reduction: Cross-docking offers the perfect opportunity to ship goods without storing them in a warehouse, consequently lowering the inventory carrying cost and allowing you to buy only what is needed. However, a great partnership with suppliers is essential to meet delivery windows with frequent shipments. Material handling cost reduction: Cross-docking helps reduce material handling and movement costs within a warehouse. While a normal warehouse process takes receiving, putaway, picking, and shipping to deliver to customers, cross-docking reduces the process steps to receiving and shipping. Warehouse storage space: With cross-docking, goods are moving directly from the receiving area to the shipping area, bypassing the warehouse storage and hence reducing the storage space requirement. Cross-docking supports JIT (Just-in-time) operations in a distribution environment: While JIT aims to have the correct inventory at the right time, cross-docking enables a shorter cycle time to ship goods upon arrival in the warehouse. In this article, I’ll introduce cross-docking features in SAP EWM and provide several settings you’ll need to properly employ cross-docking for your warehouse. Based on my experience, I’ll walk you through the main configuration steps and offer key considerations and tips to get the most out of cross-docking functionality.

SAP EWM and Cross-Docking

If your warehouse is operating on an SAP EWM system or your organization is evaluating a new warehouse system, consider the advantages SAP EWM provides for cross-docking. Two main types of cross-docking functionality are available: Planned cross-docking: This option represents decision-based cross-docking. You make cross-docking decisions prior to the arrival of goods in the warehouse. Expected incoming goods are matched to outbound deliveries so that upon arrival, inbound receipts are reverted to a shipping area directly. Opportunistic cross-docking: This type of cross-docking occurs when the goods arrive in the warehouse. When SAP EWM receives the goods, it automatically searches for cross-docking opportunities for existing outbound deliveries that are being picked or shipped. You can configure SAP EWM to perform one-step or two-step cross-docking for either functionality. In one- step cross-docking, goods are moved directly from a receiving area to a shipping area. If you use two-step cross- docking, when the goods are received, they are first moved to a cross-docking storage type and then moved to the shipping area. Other cross-docking features available in SAP EWM include a decision and planning tool, cross-docking monitor, and alert monitor. I’ll briefly introduce these tools in subsequent sections. Figure 1 illustrates a simple cross-docking scenario. The inbound receipt at ship door one is cross-docked to the outbound deliveries at ship doors one, two, and three.

Functional Features and Configuration

I’ll describe the two functionalities — planned cross-docking and opportunistic cross- docking — in more detail. Although both options help streamline your warehouse operations, it’s important to understand their unique benefits and identify their key differences.

Planned Cross-Docking

Planned cross-docking is performed prior to the arrival of goods in the warehouse. Warehouse planners or supervisors must make a cross-docking decision in the cross-docking monitor via transaction LXDCK or menu path SAP Menu>Logistics>Logistics Execution>Cross-Docking>Cross-Docking Monitor. Use the cross-docking monitor to evaluate inbound and outbound deliveries — sometimes referred to as planning and candidate documents, respectively. Based on these factors, the end result is goods flowing from receiving to shipping areas. Figure 2 provides an overview of planned cross-docking and depicts how it is executed in SAP EWM. First, you must begin the cross-docking planning process. Using the cross-docking monitor, you must make a planning decision as long as both inbound and outbound deliveries are in the warehouse management system. Save your decision in SAP EWM. Next, there are two viable scenarios: Scenario 1: Create transfer orders for outbound delivery. Transfer orders for outbound delivery are created before inbound delivery. All transfer orders are created except for planned cross-docking decisions. Once the inbound delivery is processed and transfer orders are created, all pending cross-docking decisions are now used to create cross-docking transfer orders. Scenario 2: Create transfer orders for inbound delivery. Transfer orders for inbound delivery are created before outbound delivery. All planned cross-docking decisions are used for creating transfer orders. Remaining transfer orders for outbound delivery are created during wave planning or other processes. Figures 3 and 4 show the planned cross-docking monitor used to view and confirm cross-docking decisions. Figure 3 shows the standard cross-docking monitor with inbound and outbound delivery information in the left pane. When you select an inbound delivery, the monitor displays the details in the right pane. You initiate a planned cross-docking process from this screen by selecting an inbound or outbound delivery and clicking on the Plan button. By clicking on the Plan button, the screen shown in Figure 4 appears automatically. The Cross-dock planning screen finds matching outbound and inbound deliveries that could potentially be cross-docked. The left pane of Figure 4 displays the inbound deliveries, and the right pane shows the outbound deliveries. Planners can click on the Show LnkInfo button to view system-suggested cross-docking decisions. After you review the possible cross-docking scenarios, confirm your planned cross-docking decision.

Opportunistic Cross-Docking

Opportunistic cross-docking is a system-driven functionality that, once activated, does not require manual intervention to confirm decisions. The Cross-Docking Configuration Steps section explains how to activate opportunistic cross-docking in your system. Figure 5 provides a high-level overview of the opportunistic cross-docking process flow. The opportunistic cross-docking process consists of four main steps: Step 1. Transfer orders completed. The transfer orders for the outbound deliveries are already created. Step 2. Create inbound deliveries. The inbound delivery arrives, and transfer orders are in progress. Step 3. Link inbound and outbound delivery. SAP EWM identifies the material on the inbound delivery line that matches the requirement on an outbound delivery line. Step 4. Replace transfer order with cross-docking. SAP EWM cancels the existing outbound transfer order and substitutes it with the cross-docking transfer order. Keep in mind that a cross-docking transfer order is basically a transfer order from storage type 902 to storage type 916. 902 is a goods receipt storage type, whereas 916 is a goods issue storage type. This step ensures that cross-docking occurs directly from receiving to shipping.

Cross-Docking Configuration Steps

In this section, I’ll review some critical configuration steps to activate cross-docking for your warehouse. There are some steps that are beyond the scope of my article. I suggest reviewing these steps in the Logistics Execution section of your IMG. Step 1. Confirm moving the goods from storage type 902. The first step before starting cross-docking configuration is to change or verify the properties of storage type 902 (receiving) and storage type 916 (shipping). Follow IMG menu path Logistics Execution>Warehouse Management>Master Data>Define Storage Types and select 902 storage type to display the screen shown in Figure 6. In storage type 902, activate the Stock mvt requires confirmation setting in the Stock removal control section. You must activate this setting because it is a basic requirement to enable the confirmation of goods movement from the receiving storage type. Step 2. Activate the Stock plcmt requires confirmation setting in storage type 916 (shipping). Follow IMG menu path Logistics Execution>Warehouse Management>Master Data>Define Storage Types and select 916 storage type to display the screen shown in Figure 7. In the Stock plcmt control section, activate the Stock placement requires confirmation setting. This step is required because cross-docking transfer orders must be confirmed in storage type 916 (shipping).

Important Configuration Settings

Cross-docking is a part of Warehouse Management in Logistics Execution. Several settings are available to meet your warehousing needs. Follow IMG menu path Logistics Execution>Warehouse Management>Cross- Docking to view a list of general settings and add-on options, as shown in Figure 8. Cross-docking configuration requires several steps. Based on my experience, I’ll cover some of the most important settings to help you get started. Refer to https://help.sap.com for more information about other available settings. To fully implement cross- docking in your supply chain, I recommend consulting with SAP EWM experts for additional details. To start configuring the general cross-docking settings, follow IMG menu path Logistics Execution>Warehouse Management>Cross-Docking>General Settings>Maintain Warehouse Level Settings to display the screen shown in Figure 9. Figure 9 shows some of the key parameters that you must specify, such as:

• Defining your warehouse number
• Enabling or disabling two-step cross-docking
• Defining the storage type if two-step cross-docking is configured
• Activating opportunistic cross-docking
• Determining if first in first out (FIFO) should be considered
• Entering relevant time reference and planning time values
• Modifying movement types per cross-docking relevancy

Two-Step: Select the Two-Step check box to activate two-step cross- docking. To configure one-step cross-docking, leave this setting blank. If you enable two-step cross-docking, you must also define the storage type in field St… because you want to place stock prior to shipping. Warehouse: Identify the warehouse number. In my example, I use WM2 for my SAP EWM system. The warehouse numbers are typically company specific. OppXDck: Select one of the drop-down menu options as shown in Figure 10 to activate opportunistic cross-docking. I’ve selected Opportunistic cross-dock allowed only for inbound, which enables inbound deliveries to be cross-docked for matching outbound deliveries. FIFO: In a normal scenario, cross-docking overrides FIFO logic as the newest material received is shipped. To use the FIFO strategy instead, select the Consider FIFO checkbox in Figure 9. Then you must define a FIFO tolerance duration to determine the upper limit of time difference between the materials in stock and the materials of an inbound delivery that permit cross-docking over FIFO. Time reference and planning time: These values for inbound and outbound deliveries are relevant to planned cross-docking (Figure 11). I’ve specified the time reference as delivery date and time for outbound deliveries. Users typically set the planning time to 48 hours, which means that inbound and outbound deliveries with a delivery date and time within 48 hours will be considered for cross-docking. Movement types: You need to define warehouse movement types that are relevant for cross- docking by selecting the checkbox if it’s relevant (Figure 12). This step is important for SAP EWM to make planned and opportunistic cross-docking decisions. The relevant movement types tell the system that receiving and shipping transfer orders are eligible for cross-docking.  

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